Biobased polyurethane (PU) demand was over 1600 tons in 2015 and projected to surpass 2600 tons by 2023, growing with estimated gains of 6.5% CAGR up to 2023. Increasing bio polymers application scope in various end use industries owing to its sustainable properties are key trending factors to drive global natural oil polyols market growth.

Major conventional PU manufacturers are preferring to shift towards utilizing eco-friendly products derived from biomass for product manufacturing. A number of biotechnology companieshave been collaborating with leading playes for technical know how for manufacturing bio based PU. Biomass based raw materials will help to curb carbon emissions and are expected to be economically sustainable which may positively influence durability & performance of PU.

Industry shift towards development of bio-based products in order to reduce dependency on petrochemicals may drive NOP market size. They are comparable in terms of longevity and sustainability when used as a substitute for petrochemical polyols. Polyurethane is expected to be sustainable and may positively impact performance and durability.

Furthermore, the European Emission Standards (EES) is increasingly implying stringent regulations on vehicular emissions from tail pipe. The trend of continuous efforts to reduce vehicular emissions is anticipated to continue over the next few years. These emissions are highly influenced by the overall vehicle weight, which may be lowered by using bio-based materials to build the chassis of the vehicle.

Japanese Government’s Biomass Nippon Strategy post-adoption of the Kyoto Protocol has prompted companies such as Toyota and NEC to accelerate their R&D levels into bio-based plastics and to raise the bio-based content of their products. Toyota is planning to switch 20% of the plastics used in its vehicles to bio-sourced plastics by 2015 and expects bioplastics to help in its efforts to accomplish its company-wide goal of reductions in CO2 emissions. Diversification and growth of niche application segments such as food and cosmetics industry may fuel industry growth. Additionally, companies such as Vertellus and BioAmber have been investigating commercial viability of 100% bio-based polyols. Increasing R&D spending coupled with introduction of 100% bio-based NOP may provide lucrative opportunities to industry paticipants in near future.

Increasing soy oil demand in other alternative industrial applications such as fuel additive and other polymers may be attributed for low availability. Increasing penetration of PU demand in furniture, automotive and construction industries may have positive influence on the market growth. Castor oil products set to witness highest gains, growing at over 7.5% CAGR up to 2023. High purity and resistance towards hydrolysis are key stimulating properties to drive product demand. Castor oil polyol is one of the purest commercially available productrequiring minimalistic modifications as compared to other counterparts such as soy oil and palm oil.

Palm oil derived product are estimated to register significant growth of over 7% during the forecast period. Advancements in extraction techniques coupled with increasing acreages of castor and palm particularly in south east asia is estimated to have a positive impact on the supply of natural oils over the forecast period.

Natural Oil Polyols (NOP) Market, By Region

North America NOP market size dominated the regional industry and was valued at over USD 2.1 billion in 2015. U.S. and Canada are key contributing countries owing to favorable government regulations and consumer awareness.

Latin Ameirca, led by Brazil, may witness gains at over 9.5% and surpass USD 400 million by 2023. Construction industry growth coupled with increase in automobile sale may drive Latin America market growth.

Natural oil polyols are derived from vegetable oil and are used in PU production. One of the leading automotive manufacturers, Ford Motors made seats for Ford Mustang using soy oil based PU foam. They are widely used for metal and plastic coatings, door foams and headliners in the transportation industry. In addition, they are also used for cushioning in footwear and for concrete and wood coatings in the construction industry.

Manufacturing process produces 30-35% less GHG emission and reduced energy demand by more than 25% compared to polyols manufactured using petrochemicals. Petrochemicals are widely classified into olefins and aromatics which are used to manufacture plastics, fibers, elastomers, resins, surfactants and lubricants. Elevance collaborated with Stepan in June 2013, aimed at developing and producing natural oil-based C18 diacids for processing into polyols which are further used in manufacturing bio-polyurethanes.

In March 2014, Succinity GmbH, a JV between BASF and CorbionPurac for manufacturing & commercializing bio-based succinic acid, initiated its first commercial manufacturing facility. Major petrochemical based polyol manufacturers such as Dow Chemical Company and BASF have shifted their focus towards manufacturing natural oil polyols in order to reduce reliance on conventional polyols thus reducing risks associated with its price volatility.

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